How to use the AI window
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Who is still paying a year later
Cheap AI tools bought to try lose most of their revenue within a year. Products bought for a defined, recurring job keep it the way ordinary business software does.
Share of last year's revenue from existing customers still there a year later, by monthly price.
Most of the gap between apps that keep subscribers and apps that lose them opens at the first renewal.
How the moat has changed 3 times
A moat is whatever makes a company hard to compete with. The way companies build it has changed 3 times. What they share: something has built up inside the company that a competitor cannot get by copying the visible product.
The advantage already exists.
- VisaNetwork: the more cardholders and shops, the more valuable it becomes.
- SAPSwitching cost: so embedded in processes and data that leaving is expensive.
- WalmartStronger economics: scale and operations make it cheaper to run.
- Coca-ColaBrand and trust: chosen for more than what is in the bottle.
The mechanism is designed in advance.
- UberMore drivers → easier for riders to find a trip → more interesting for drivers.
- AirbnbMore listings → more valuable for guests → more reasons for hosts to list.
The product must learn from real work.
- Understands the customer betterKeeps the context that matters, so the next job starts where the last one ended.
- Decides more preciselyLearns which decisions worked and which led to mistakes.
- Handles exceptionsSees recurring non-standard situations and learns to treat them correctly.
- Enters the workflowGives the answer and helps perform the next action.
- Cheaper and more reliableFewer cases need manual review; errors are caught earlier.
- Earns trustThe system shows the same quality again and again, and people stop checking.
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